CBS and Time Warner Cable avert blackout; agree to continue talks

Poppy Montgomery; David Letterman

John Paul Filo / Associated Press

At issue is a fee for the CBS properties. The network is seeking a big increase for its stations, which Time Warner Cable is resisting. David Letterman, which is on CBS, is pictured on the set of the "Late Show with David Letterman."

At issue is a fee for the CBS properties. The network is seeking a big increase for its stations, which Time Warner Cable is resisting. David Letterman, which is on CBS, is pictured on the set of the "Late Show with David Letterman." (John Paul Filo / Associated Press)

Joe Flint

Time Warner Cable and CBS Corp. agreed to extend their current distribution contract to continue to negotiate a new pact, thus averting a blackout in Los Angeles, New York and several other cities around the country.

The two sides agreed late Wednesday to extend their current agreement until at least 5 p.m. ET Monday to continue to wrangle over terms of a new deal. The agreement was set to expire at 6 a.m. Thursday.

The two sides have been trying for weeks to come to terms on a distribution deal for CBS-owned TV stations, including KCBS-TV Channel 2 in Los Angeles and WCBS-TV in New York as well as cable channels Showtime and CBS Sports Network.

Oftentimes an extension is a sign that progress is being made during hard-fought negotiations.

At issue is a fee for the CBS properties. The network is seeking a big increase for its stations, which Time Warner Cable is resisting. CBS, which is the most-watched TV network, argues that it is undervalued compared with cable channels that have lower ratings but collect higher distribution fees from pay-TV operators.

Time Warner Cable has countered that it ia willing to pay more for CBS but that the network is being too aggressive.

Media analyst David Banks of RBC Capital Markets said in a recent report that CBS is looking to increase the fee Time Warner Cable currently pays from less than $1 per subscriber per month to a figure approaching $2 in the first year and with subsequent increases in later years.